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tv   Squawk on the Street  CNBC  December 4, 2009 9:00am-11:00am EST

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the one and only "squawk on the street." good morning, everybody. i'm mark haines. >> i'm melissa lee in today for erin burnett. we've got breaking news. the market is reacting dramatically to that much better than expected jobs report. nonfarm payrolls for the month of november down. that compares to down 125,000. we also got positive revisions for the last two months. a jump in the average workweek, as well as in temporary hires. >> looks like a lot of good news to me. futures are sure taking it that way. futures right now up 13.10. still 11 and change above fair value. looking at a gain of 100, 110 on the dow. >> we've also got a dramatic reaction in the treasury market with the yields jumping as the prices on treasuries plummeted. we've got the ten-year note now yielding 3.478%. dollar jumped as well. that breaks the inverse correlation that we've seen between dollars and stocks. and some view this as positive.
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we'll see if that bears out for the rest of the session. we do have the dollar index reacting. look at the price of gold. it is down by 2.4% right now. >> okay. let's get right to the market reporters on what could be a very big day. we start with cool breeze here at the big board. bon bob? >> what an outlier on the nonfarm payrolls and the average workweek, 30.2 hours. futures dropped 13 points on that news. and the dollar was up at the same time. you saw gold was down. treasury yields are moving to the upside. all this is good news. the big issue now is traders are going to have to confront the main issue for 2010. when the s. the fed going to start withdrawing that tidal wave of liquidity they let loose on the world? good news. we have a good shot at breaking the 52-week highs on the dow jones industrial average as well as s&p 500 today. elsewhere, bank of america raising over $19 billion. they're going to use that money to repay the t.a.r.p. money. that removes a major overhang
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for them. citi group? issues there. discounter, soft november but big lots had excellent numbers for november and their earnings were good and their guidance for the fourth quarter also a lot better than expected. mike huckman, how are we looking at the nasdaq? >> bob, after taking a one-day retreat it looks like the nasdaq is going to return to its winning ways this morning because we're up almost 1%. at least according to the premarket indicator. going to start by talking about java this morning. for once, not the coffee company takeover battle but java as in sun microsystems. the ceo of oracle is apparently willing to create a separate business unit within sun microso apiece european regulators to give him a green light for sun micro. cisco says as far as it's concerned it now has complete control of the norwegian videoconferencing company with 90% shareholder support. we are seeing major take down of
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take 2 interactive. they missed expectations. it's going to lose money when the street was thinking it was doing to make money. and a whole mess of analysts downgrades on that stock. down 31% in the premarket. sharon at the nymex. >> we're seeing a perfect storm here in the gold trading pit. we have the dollar stronger, the you're y euro down and gold prices shrinking. key level to hold here is 1183.50. that was friday's low, last week. you know how gold prices have rallied in the past week. we had already seen profit taking here. perhaps gold was over-extended already. of course, the positive jobs data tnd strength in the dollar has led to greater sell-off here in the gold market. we're looking also at precious metals here that are all down. silver down sharply. and copper, which had rebounded initially. perhaps on hopes of more industrial demand, is lower. crude prices rallied as well. initially on the jobs data to
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over $77. right now we're lower on crude as well, still above the $76. high inventories also keeping a lid on prices. rick santelli, to you in chicago. >> all right. let's go right to the epi center. if you look at the dollar index over a two-day period, wow, what a moon shot. indeed, we are around 75.38, at least the last time i looked. live quote. what does that mean? a weekly chart says it all. it means we are up over a third of a cent on the week. a very key week. we spent more time under 75, closer to 74 than we have in 16 months. now, if the dollar can remain strong, and many are quite happy it is, art cashin and everybody is talking about it, including bob pisani, hold on to some of their gains, we could be heading to a logical correct path for good economic activity in regard to the jobs report, of course showing up in logical fashion in
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the dollar and equities. rates are up a boatload. especially when you look at the two-year kind of tied to the fed and the fed still most likely on hold. now let's go to steve liesman to dig deeper into these numbers. >> yeah, and there's some digging we need to do here, rick. this is the best jobs number in two years. it's been since january 2008 we've had job losses in just five digits at minus 11,000. you have to go back to december 2007. that is two years since it was positive. here's the debate. is this a one-hit wonder or a sign of things to come, as in positive job growth? looking inside the number there is some evidence that is the real thing. here are the numbers. minus 11,000 on the jobs number. october advised, minus 111,000. add up the revisions and, hey, 159,000 positive, or to the positive side. unemployment rate defying expectatio expectations. down 10% from 10.2%. remember, the prior month it had a huge drop. that's sort of unusual. makes sense that it might
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moderate. average hourry earnings disappointing. 0. 1% gain. the data sparked a sell-off in bonds, as rick said. i just asked bill gross from pimco whether this change is the outlook for the federal reserve. >> i don't think much. randy's pointed out in the last half hour that it takes 100 to 200,000 jobs just to sort of stabilize the unemployment rate. >> here are the job details. goods producing down again. inside that is construction and manufacturing. again, those losses are moderating. look at the service sector ticking up. by the way, defying the signal in the ism nonaftering that we got yesterday that made some people pessimistic about jobs. temporary help is up 52,000. a number we watch every month, we call it the real unemployment rate. this adds up the discouraged workers and people working part time for economic reasons. what you see is a tick down for the first time in three months. it doesn't show the tick down there. oh, that's just the regular jobs
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number. that's coming up back up towards the zero number. i don't know if we have that other graphic. i guess we don't. anyway, that number, the real unemployment rate ticked down to 17.2% from 17.5%. so add up the increase -- there it is right there. ticking down just a little bit right there. add up the workweek gains to 33.2%. revisions to prior months. the decline in jobless claims. it all points so far, guys, to this being more real than rogue. go back to mark or is that erin? >> melissa. >> melissa, sorry. >> steve, can i ask you just one question? >> i'm sure. >> on "squawk box" mark zandi said the numbers are too good. seasonal factors. can you see that happening that it will be a much different number? >> i looked at the nonseasonally adjusted number and i think the nonseasonal number was minus 19,000. there was some speculation that seasonals would really flatter
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this number. partially because november '08 we lost so many jobs. so it was thought to be favorable seasonals. i don't see that now at the moment. there's also talk about census workers. i don't see any evidence that this numbers was tremendously flattered by the hiring of census workers. >> thank you. >> you mean -- you mean it's really good news? >> you know, mark, i am going to go back and go overall the data that i saw this morning to make sure because i'm as skeptical as you are. this is a pretty, pretty dramatic balance. if you bant to make it even better, what you can say is this -- given the revisions that we've had to prior months we might be creating jobs already. november might actually be positive if the revisions go the way they go. i think the thing you've got to talk about with all your investing guys there, is, hey, how does that change the calculus of where you put your money if we're in a time period ofs positive job growth? >> i'm personally am taking it at face value. >> no, not you.
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seven years i've never heard you say that. >> it fits in with the trend. >> there is data to back it up. remember the report, mark, remember that one? they look at state tax collections? >> yeah. >> i read that report overnight. they ended up above 50% for the first time in several years. so more than half of the states are meeting their state withholding tax collection. that's kind of a direct data. it's pretty good data. >> thank you, steve liesman. bank of america selling more than $19 billion of equity last night. that would help repay of money borrowed from us. as bank of america's board gets set to meet tuesday and talk about a new ceo. mary thompson live in new york for us this morning. hi, mary. >> gee elogic said this was the biggest raise of money on record. demand was a little bit better than expected helping the bank to raise that $19.3 billion by selling $1.286 billion common equivalent shares. those shares will be converted on a one for one basis into common stock pending shareholder
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approval were priced at $15 each. now, the $19.3 billion along with an expected $4 billion from asset sales and over $22 billion from the bank of america's cash on hand will all be used to repay the government $45 billion in t.a.r.p. funds that it loaned to the bank over the last year. now, once converted these common equivalent shares will be diluted to shareholders at the charlotte-based bank but the new shares will increase the bank's tier one common equity ratio. this is, of course, an important gauge that regulators use to monitor bank's health, typically the higher the better. more importantly though, the sale and expected repayment of the t.a.r.p. money gets bank of america out from under the government some free from compensation restrictions. something that is expected to help it with its search for a new ceo. as you said, the board reportedly meeting next week. mark, back to you. >> thank you very much, mary thompson. we have the faber report coming up next. >> indeed, we do.
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plus, much more on the markets and the reaction to the jobs report. much, much, of course better than expected, as we told you. futures right now indicating a sharply higher open on this friday.
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welcome back. of course, you heard mary thompson talking about that huge offering that was priced by bank of america. let's take a look at how we think the stock is going to open this morning. the ability of banks to raise capital has been such an important component of this overall rally, really. and the history of, in some ways, the financial distress that our system went through. if you recall, of course, back in '07 the banks feverishly raised capital from places where they could get it. merrill lynch, now of course a part of bank of america raising capital. bank of america, citi, the sovereign funds, everybody trying to be tapped that had money to raise capital for what many of these banks ultimately realized is '07 drew to a close and '08 began were going to be significant losses. but then the losses started to come. we lost lehman brothers and, of course, there was no one left to raise capital from in many ways,
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except the government. and then we moved through that. and in the spring if you recall, the capital-raising began in earnest yet again. much of it taking place initially under the backdrop of a federal government here in the states and abroad as well, in the uk for example, that was willing to backstop, a lot of bad assets. take a look at the equity capital raisings on record so far. rbs, of course, the struggling uk-based giant in first place in terms of a one-time capital raise in the equity markets. $24.3 billion. icbc, hsbc, fortis. look at that. and then you finally get some banks here at home, of course, and that is the offering that we've been talking about that you heard mary thompson talking about. $19.2 billion. what they're calling it a convertible preferred but it's really something that will all mautly be converted to one common share, $15 a share.
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pending shareholder approval because they're issuing so many shares. interesting story here on bank of america and one that's been discussed for some time, since the spring, namely, when you get through to so many of the write downs the earnings power of the bank itself will come to the floor. one of the chief proponents of this, largest hedge fund in the country, i will direct you the most recent letter from paulson in terms of what they saw as a restructuring opportunity at bank of america. one of the reasons why they are one of the largest holders of the bank. 2011 they see this bank earning $57.5 billion. then you normalize a provision of $16.3 billion. then you also end up after you do preferred and dividends and income tax with net income of $26 billion. again, this is projections. why they own the stock for 2011. the end of the day you end up with normalized earnings per share right around $3 a share. if you throw a ten multiple on
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that, well, you get a $30 stock, don't you? hence, one of the reasons why paulson has been a proponent and many others have brought into this and why so many, of course, are therefore buying into that huge offering that will allow bank of america to get out from under the government. back to you guys. >> thank you, david faber. okay. one last check of the futures here because the session has ended and that's the high of the morning. up 15.80 on the s&ps. 14 1/2 above fair value. 125-point rise in the dow. can't be anticipated off those numbers. and as you can see, the nasdaq also looking strong. nasdaq has been stronger than the rest all week, really. next up, the buzz beyond the big board, the word on the street as we countdown to the opening bell. and in the next half hour the white house's first reaction to this morning's much better than expected jobs report. secretary of labor will join us.
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you're watching "squawk on the street" on cnbc.
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okay. we're back. we're down here on the floor. with the man, the myth, the legend, gordon charlop, also known as dr. know. he did flip-flop thee weeks ago and that turned out to be a pretty good call. >> you're pretty kind there, mark. it's starts with a happy 70th
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birthday to bob cowen. let's talk about not just the 10% we're looking at but the huge 6 number, impressive. you couple that with the bac number. as we go into the end of the year you've got to think that the bulls are going to break the backs of the bears and there's going to be short covering. we're going to carry this thing right through the end of the year. then what happens? when you look ahead into the crystal ball -- >> stop, stop, stop. >> yes, sir? >> then what happens? >> yes, sir, thank you for asking. >> go ahead. then what happens this. >> what happens in my opinion could happen. at that point not for political reasons but for prudence, the fed raises rates. people start to -- >> that's not good. >> well, listen, actually people -- listen. here's what i think. people start to re-evaluate their models a little bit and, yeah, we'll start to get top-heavy in some valuations. in some ways the market may see
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a bit of a pullback once we get through the end of the year. good until the end of the year. depending upon when the fed decides to continue to move the stimulus. then we might see the pullback then. reverse january effect, kind of like a second derivative negative upside-down kind of thing. >> we will be sure to pay close attention to you at the end of the year. thank you, gordon charlop. rosenblatt securities. upstairs to melissa. >> now let's get the buzz beyond the big board, art hogan is here. art, always good to see you. >> thank you. >> immigrate, thanks, art. i want to is you about the dollar index. the dixie is spiking higher today. it is one that was crowded with shorts. what's your interpretation of the dollar index? >> clearly one of the easiest and most popular trades out there was being short on that trade and coming into such a massive surprise we had and not just in today's print.
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the november number caught everybody off guard. if you look at the revisions for the last two months they added 159,000 jobs in total to the last two months. we've got huge revisions. big upside surprise. it's not unusual to see the kind of knee-jerk reaction you're seeing in the currency markets right now. >> that what is the interpretation of the dollar and gold? i ask you this because so many people out there who were so bullish on gold for so very long and they couldn't think of any scenario in which gold would go down. here we are again today, gold is backed off $12 an ounce. >> i think it's two distinct questions here. first of all, this one data point is not going to get the fed to start tightening rates any time sooner than they were last week before this number came out. clearly, that conversation about this move in monetary policy forward is probably not going to -- probably not justifiable. i will tell you this, though, both gold and the dollar have extended the moves in opposite directions. so in the short run we certainly see a technical move.
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in the long run, though, i think the continuation of the basement of the dollar and run up to gold will happen. you could see $150 pullback in gold before it reaches a point where the medium and long term is still positive. >> art, thank you for your time. art hogan. final countdown to the opening bell just on the other side of this break. >> this is cnbc "squawk box" -- "squawk on the street," beg your pardon, live from the new york stock exchange.
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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell is going to ring in about 2 1/2 minutes, a little less, actually. so, let's check out the headlines. big focus on the futures, up big time after the jobs report. the jobs report came in much better than expected. 11,000 jobs lost in november. that is the fewest since december of 2007. the unemployment rate fell from 10.2% to 10% even.
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as we count you down to the opening bell let's bring in ceo of and cnbc market analyst. jack, in some respects, this trading session is going to be very, very key in terms of testing key relationships, for one, the dollar stronger and we've got stocks stronger. something we haven't seen in quite some time. >> you hit it on the head. we're going to get more later on today at the 4:00 bell than right now. the reality is this is a positive number. when you take the last two revisions and add them together you look at positive job growth. what it did do is move up the time frame if you look at fed fund futures from one the fed might act. july/august time frame to may/june time frame. on one hand it might signal the beginning of the unwind of this carry trade. on the other hand, it gives the fed the ability to be able to at least keep interest rates lower for a long period of time and not be forced into any action because of the dollar. let's see, again, critical
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session. we'll know a lot more later today. >> what's your best guess right now as to whether or not the dollar index continues its downward trend or breaks at this point? >> well, i've got a feeling we'll see a little bounce in that dollar index. i think it's been over sold for quite a while. if you look at it, remember, what you want to see is stability in the dollar with equities stabilizing at this level. we are also at critical technical levels. we were talking about a little while ago, art cashin touched on it. halfway back of the whole move, melissa, from that october '07 high to march low, right here, 1120 in the s&p. let's see how it agents right here. >> always great to speak to you. he spoke about technical levels. watching the intraday. and on the dow jones industrial average, 10,513 is the 52-week intraday high. >> 1117? >> on the s&p 500. >> futures were up 1138. we're going to go charging through that level. here we go at the opening bell
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here at the big board. nuveen investment celebrating a recent listing of the mortgage opportunity term fund. ticker jls. i don't know about you but those letters make me think about mortgage opportunity return. and at the nasdaq, the spain u.s. chamber of commerce president residing over the opening bell. >> our market reporters are standing by everywhere you want to be. wee kick it off with bob pisani here. bob? >> look at the crowds here. what an outlier on nonfarm payrolls report. loss of 11,000. and average workweek increased to 3 3.2% from 33. that's a positive sign. and the bottom line is futures shot up 13 points. s&p futures, pretty much stayed there. and, of course, we saw the dollar shoot up. that's a very positive sign as well. gold down about 3%. so the big question now is that everyone's confronting down here, positive news but how much more are we going to have to
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deal with this idea of the fed adding liquidity? when is that going to be removed and how much of a negative impact is the removal of liquidity going to have down of the road on the stock market? it's going to help things in a very big way. this crowd, look at it. bank of america. you know the story. they successfully sold 1.3 billion common equivalent securities. we're waiting for it to open. 1575 maybe, somewhere around there. still not being final numbers are not out here on that. that removes a major overhang for the stock. it's going to make it easier to get a ceo, easier to retain talent at merrill. believe me, it's positive news for the other companies. discounters, they've been soft. surprising, costco numbers, last month of november. big lots came in with very good earnings report. the third quarter earnings includes november. remember, the quarter for most of these retailers ends in november and also ends in january for the fourth quarter.
9:32 am stale wait for bank of america to open. >> we're looking good here at the nasdaq. up 1.4% or more than 31 points. right out of the gate. we've got a couple of deals in tech to talk about this morning. sun microsystem shares up 5% right now on a new york post report that oracle ceo larry ellison is willing to create a separate business unit within sun microto appease the regulators to approve his $7 billion takeout of that company. cisco claims it is now officially taken control of the nor wee john videoconferencing company with nearly 90% shareholder support for that nearly 3 1/2 billion dollar deal there. in the video game space this morning shares of take2 interactive are a big loser. this company missed on earnings. it's going to lose money instead of make money. a whole bunch of analysts are piling on this morning and downgrading this stock. one analyst is quoted as saying that these results in the forecast are atrocious.
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that's his word, atrocious. stock down 33% right now. finally, in bio pharma, they have upped what it says is its best and final offer for biotech to $17.5 a share. saving pharmaceuticals with out perform rating. that's up 3% right out of the gate this morning. sharon, what's going on at the nymex? >> unemployment rates at 10% is high. a lot of traders are focused more on the revisions. they're seeing that as positive. of course, the surprising headline number as well. that is the reason why we are seeing the oil prices up $1 here, above $77 a barrel. keep in mind we're still within the range we've been in for some time here. even if we get another dollar or so higher on nymex crude we will still be within that range. the key is will we have a break above the $80 level again in the near term. keep in mind the fact that the euro broke below 1 oin $50 is
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another reason why oil prices have rallied. we're still seeing low fuel demand and high supplies of fuels as well as of crude. so that is limiting some of the gains. when you look at $75 to $80 oil that is exactly what the saudis have been looking for for the end of the year. they are comfortable with that price as we go into the opec meeting on december 27. gold prices lower but off the lows of the session. rick santelli, to you in chicago. >> thank you very much, sharon. you know, the dollar index isn't on its highs but still up pretty solid on the day. obviously. it's up a smidge on the week. that's very key. let's look at interest rates. now, there's a variety of things that could happen if rates continue to move higher. but immediately in front of us is supply next week. 74 billion in 3s, 10s, 30s. even more, so, sure, ten-year note is up eight or nine basis points on the day. but it's up about a quarter of a point, up about 25 basis points on the week. 30-year bonds up about 20 basis
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points on the week. and the dollar index is up about a quarter of a cent on the week. these are impressive numbers in a variety of ways, especially when you look at the charts. now, let's go back to melissa lee. >> thank you, rick santelli. the management shake-up over general motors continues this morning. some big executive changes most notably vice chairman bob lutz remains on as vice chairman. he will also be an adviser when it comes to the design of automobiles. they're also promoting a number of more junior executives. this in an effort to retain them. for instance, phil lebeau is on the phone, i believe, and let's go to him right now, phil? >> hi, melissa. i just talked to some sources in general motors. this internal broadcast is taking place within general motors to executives and employees of gm. here are the most important changes being announced by ed whitacre right now.
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bob lutz remains vice chairman but no longer in charge of marketing chun communication. he goes back to his previous role and plays to his strength as executive. he is now going to take on senior adviser role to ed whitacre and will be taking over product planning. that was really his previous role and that's where he excelled and has excelled throughout his history. susan docker now takes on communication. a couple of there important changes. steve gursky has been on the general motors board of directors since it was reconstituted in june, he now takes on an expanded role as a seniored ed adviser of the offi the chairman. essentially he's working hand in hand with ed whitacre as they try to remake this company. that's an important move by whitacre acknowledging that he understands the changes that need to be made at general motors. he's leaning on lutz.
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nick riley in charge of china now goes back to europe and is going to be in charge of open pell and all the european divisions. they've moved up a couple of executives who have been coming up the career path rather quickly to take over international operations in china and mark now takes over gm north america. so these are significant moves. one last thing, guys, to keep in mind. ed whitacre and the announcement today, he says, listen, you're not going to get fired for trying to do something. i want changes and i want them now and i want us to be bold and be aggressive. so the tone of this announcement today rather upbeat. i've listened to it for a while. and it's clear that ed whitacre is trying to infuse general motors with sort of a boost of let's do it, let's go out and make these changes now. >> all right. phil lebeau, thank you very much for that update. major management changes at general motors. bob lutz remains as vice chairman. wall street's big surprise
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this morning, only 11,000 jobs lost last month. that is a smallest decline since the start of recession in december 2007. turn employment rate at 10%, down from 10.2% for the month of october. we've got your first reaction from the white house with labor secretary hilda solis. >> good to be with you. >> have we seen the worse in terms of job loss snes. >> you know, as you mention, this is one of the lowest -- lowest number of job losses since the recession started, so we don't -- we don't -- you know, we take this very seriously. we're not going to be celebrating and jumping up and down because until we add more jobs we're going to continue on this notion that we have to do everything we can to make sure that we help the financial markets, that we continue to build partnerships, that we continue to move ahead. yesterday at the president's job summit we heard a lot of good ideas. we got a lot of good feedback on the direction of where we should go in terms of the administration. and we're looking forward to
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hearing from the president today. he's going to be in allentown, pennsylvania, he'll be speaking in about a week. more importantly and specifically about some of the efforts that he'll be undertaking to help improve the economy. keep in mind the recovery act is still well under way. as you can tell, i think the recovery act is working. >> madam secretary, this is the first time since you took the job 11 months ago you've had a good number to talk about. come on. break out the party hats and confet confetti. i will give you a number that kind of lends credence to the u.s. number. statistics in canada this morning reported an increase in full-time employment of 39,000 in november. so it seems fairly clear that a trend is in place toward some where down the road, maybe not next month, but soon we will have job growth. do you agree?
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>> yes, yes. we are seeing a stabilization occurring with that. i want to say that just this last month, 52,000 jobs were added in the temporary area. and those workers, as you know, do a lot of consulting and help to provide the kind of support that many businesses need before they initially start to really hire full-time people. i'm happy to see continued growth again in the health and also in education area. we know we have to do more. i was very happy and excited to see that we added more jobs in civil engineering. that is kind of a little telltale sign to show that people are starting to gear up for big major construction projects. and that's where we know the recovery act will have a big impact because we know that we have still a lot of money going out to build highways, high-speed rail, and help our local economy. >> madam secretary, would you like to see a second stimulus package, if you will, some sort of a jobs creation package, or do you think that perhaps now we can sort of wait and see as to
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where the jobs picture is going since we are seeing this improvement? >> i think we still have a ways to go. the amount of people that are still looking for work, that are out there is very, very large. and we need to continue to focus on good ideas. i don't see necessarily a second stimulus bapackage, but i do se we have to continue to see those people that are still in that period of job loss, that still need help with unemployment insurance, that still need assistance in job training. i'm very delighted that i'm seeing also growth in the energy area because the green energy movement, i think, is starting to take hold. and i'm very delighted to see because over the last two months, those areas we see some movement occurring. so i think the president has really led us down a good path but i don't think enough people have focused in on those areas. but the recovery act is having an impact, i can tell you. >> secretary solis, thank you for your time. we appreciate it. >> thank you. a quick check on the markets for you. the markets really enjoyed that
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jobs number this morning. we were flat until that number came out. now the futures took off. >> by the way, mark, the nasdaq, new 2009 high on the composite. >> and that is, i'm pretty sure, a new intraday high. >> on the s&p 500. indeed. >> so -- and we're looking at 10,500 now on the dow. here now for the cnbc edge, thomas lee, chief u.s. equities strategist at jpmorgan. thomas, good morning. good to see you. >> good morning, mark, melissa. >> okay. here's the question. which comes first, the dow 11,000, dow 10,000? >> i think dow 11,000 is a much greater probability in the near term. >> okay. so you are enthusiastic, cautiously confident? describe your feeling about the market. >> we've been constructive on equities. you know, when we look at december we think there's a lot of pro cyclical data that is
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supporting a really strong data. in '10 i think you will see the boom in terms of jobs recovery. we're bullish into year end as well as early 2010. >> does that mean that you would advise clients out there to invest in the highest beta sectors? if you believe that it is going to be a good year for the markets coming up, you might want to be in the one of the sectors that are leveraged most to the upside. >> that's right. you know, we published a report in october just noting that if you were trying to leverage a turn in payrolls, they're really 13 groups that out-perform during that first six-month period. and as you mentioned, melissa, it is, you know, mostly high beta, include a lot of technology like software and the wireless service names. it's going to include the retailer, specialty and hard line retail. but it includes the smokestacks as well, coal stocks, aluminums, the tankers and the rails as well. >> thomas, we just want to break in because we are looking at
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live pictures. the president just leaving andrews air force base to head to allentown, pennsylvania. this is a continuation of that jobs summit held yesterday at the white house. very big day there. and we will have coverage for you when obama actually lands. getting back to it, thomas. you mentioned a lot of upside in the high beta names. does this mean that we should be taking money off or see a downside when it comes to gold as well as the miners? >> well, you know, i think gold is part of a risk trade that's really fueled by extremely low policy rates globally. so i think the risk trade looks like it's going to continue to be pretty strong next year. and the dollar continues to be kind of weak. so, you know, i specifically don't forecast gold but i can't see how we would argue for a correction in gold prices. >> the dollar has been strengthening lately. i take it you think that's just a minor interruption in the trend? >> that's right. you know, i think it's -- i think it's actually fairly normal for the dollar to be weak
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here as people start thinking about risk trades globally. but, as you know, you know, a weaker dollar is pretty circle for corporate profits and for stock prices as well. >> all right. thank you very much, sir. appreciate it. thomas lee. more market reaction to the jobs report just seconds away. >> and later this morning, one of the best mutual fund managers of the decade. see why he's done so well and how you can get in on it. you're watching "squawk on the street" on cnbc.
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all right. the s&p hitting a new intraday high for the year. it doesn't end there. we're talking more about the markets and the reaction to the jobs report. i can't read this. co-cio? it doesn't matter. you run the place, right, dan? >> yeah. >> all right. >> what, dan's not here? >> dan's -- >> all right. dan is here.
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>> yes, i can. >> somebody said stretch. >> dan is apparently there. he can hear us. >> i'm here. >> okay, good. what we need is you and me and whoever else is in my ear should go the hell away. now, let's talk about the market. are you optimistic or are we, you know, too far too fast, yada yada? >> you know, we are optimistic about individual stocks. i think we're more neutral on the markets given the magnitude of the move off the haines bottom. >> thank you. >> but we think that you can make a lot of money in individual stocks. there's going to be winners and losers in every sector. we're focusing on finding the winners. >> is there a theme to find the winners, looking for certain sector or parameters like free cash flow? >> you touch on free cash flow. that's an important metric that we focus on. it's interesting to note that you haven't been paid focusing on those kinds of companies since the haines bottom. most of the move in the market has been smaller, lower quality,
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higher levered types of companies. we think the market is somewhat in transition right now to the higher quality, better balance sheet type companies. >> so, dan, you'ring looking at those specifically at a rotation within the russell. so within the small-cap bracket, you like the larger and less levered names, is that correct? >> yeah, that's where we have begun to migrate to because we see finally some recognition of those better companies and we think that's going to be a theme going into next year. >> top pick, dan? >> the genesee and wyoming railroad. last time i was on you were curious about the name of the company, i recall, mark. but this is a global company. it's probably our best managed, small cap company that we own. great balance sheet. they are a global proxy for trade. we happen to be quite bullish along with mr. buffett about the railroad industry. we think this is a winner that sector. they have very little debt. can really take advantage of
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acquisition numbers. >> thank you so must have for your time. >> thank you. all right. stocks on the move coming up right after this break. >> right after the break. >> i hope that means el nesto grande. >> perhaps it does. if it's somebody else, it will be just as good, i'm sure, just to be fair. and also coming up, the airline sector being done, industry clearly taking off. the airline index is up a whopping 73%.
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welcome back. the dow hit a intraday high. 10,516. american express, a hot stock. chevron on up after the comments from credit suisse and new assumed coverage. interestingly exxon assumed that neutral. she ron assumed a positive. big lot, hottest stock, up 15%. beat on the trailing quarter. the fourth quarter forecast also looks strongly. okayed about 7 1/2% of market cap stock buyback. layman's term, $150 million. under armoo armour, they think stock is headed to $32 a share. 25% more from here. back to you. >> thank you very much, matt
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nesto. mark, here, was very happy to see you. investors wanted to play the recovering economy. look at the airline stocks. airline index is up 74% in the last six months. talking about holiday travelnd bondy bob, senior research analyst. bob, good to see you. the international trans sport association said, you know what, profits may be decent for the third quarter, fourth quarter, but fuel prices are going to go up. does that mean the trade is over in this sector? >> i don't think so. these things are sitting at levels that clearly better than they were earlier this year. earlier this year everyone was predicting bankruptcy. people have taken a lot of steps to fix the balance sheet. i think when you look at the reduced capacity the way people have adjusted their schedules and their operations, they're really poised, really leveraged to be kind of ahead of the world when things finally turn up. >> how did the airlines shake out individual players in terms of their hedges and who might be
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best positioned going into a rising fuel environment? >> i think there once was a time when southwest was the best hedged. right now they're pretty much all about the same. they greatly scaled back on their hedging. they have modest hedges over the next quarter or two. but so many people got burned on hedges in the last year when things came back down so quick that there really isn't a lot of hedging. i don't think that's really the issue. i think the issue is that we're starting to see traffic turn up. we saw some turn up in october. a couple of guys are giving us data on november. and it really looks like we're starting to see the up turn in traffic. that's really what has to happen, is the traffic needs to go up. traffic goes up, we can deal with fuel. >> okay. let's say i want an airline stock in my portfolio but only one. which one would it be? >> i guess at this point, you know, i think they're all going to move a lot together. they trade very much inproved. >> come on. just one. >> let me give you one. i would probably take u.s. air
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or airtran, depending on whether you are -- they are two that have not come along as well. they're kind of beaten up. >> got to go. thank you. we have breaking economic news on the other side of the break, or do we have it right now? oh, okay. roll then animation. that usually means -- stand by, who knows what's going to happen next.
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welcome back to "squawk." let's see, this makes it seven out of ten positive increases in factory orders for '09. so this is pretty decent news. it is a bit rearview mirror. not only that, last month's look at up 0.9 is originally reported as now up 1.6. if you connect the dots and, granted, things like temporary workers may have made a difference, but still, all in all, good jobs news, pretty decent factory orders. of course, a strong dollar and strong stock market making such good sense, investors seem in better spirits today. remember, with those two being up, we see higher interest rates. how will that play out? time will tell. now, let's go back to mark and
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melissa. >> thank you, rick santelli. let's talk more about the number and the big jobs report. steve liesman back at hq. stevy, i threw something into the mix when we were talking to one of our guests, oh, with labor secretary solis, that statistics, canada, reported an increase in jobs in canada in the previous month. so, you know, there's less and less sense that this is an outlier. >> yeah. especially as we increasingly become a province of canada, mark. that's a good thing. mark, i've been reading economic reports over the past hour and i don't have anybody saying that there's some sort of outlier, something here that's a quirk in the data this ch kind of gets to the question that you asked at the top of the last hour. this is some sense that, hey, it may be ahead of where we're going. for example, the jobs number we have, the payroll number is ahead of where it should be given where jobless claims are. the direction is right. and again, looking at the revisions to the prior month, temporary help, which you can
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say is an outlier, in fact, is a good sign because that's what happens. temporary help is the first thing people do, hire temporary workers and then that is a full-time jobs in the future. overall, the number seems to be standing up as a real number not a rogue number in the minds of certainly economists. i guess the market given the change in the dow this morning. >> all right. let's get to melissa and bob. >> thank you. bob, we crossed key levels today. new train day levels on the dow and s&p 500. >> and we've got 80% of the stocks to the upside. 80% of the volume. we're not quite at 90% upside day, which would technically be a little more significant. but 80% upside on the volume, 80% upside on stocks is good. you know what's doing best, hard to see it, but the transports hr. that's because not only is the economic news helping us a little bit but we've got some decent numbers on terms of traffic for november for some of the airlines, united, they came
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out with fairly good numbers after the close yesterday. you remember, melissa, you've been covering this as well, the airlines have been moving up all week as we saw anecdotal reports that africa over the holiday season, black friday season was fairly good for the airlines. some of the stocks up 20% or more. so that's certainly good news. look at the other things moving. banks are doing fairly well. bank of america got that very important deal. >> that's surprising, the price action in bank of america today because it's not down at the $15 level. >> no. it's -- well, it's opened around the 1576 level and now it's, you know, a little bit on the downside here. was just a few minutes ago. on the positive side. it was down compared to the close yesterday. >> why would it trade above the $15 level if we know it's going to be diluted by 10%? >> number one, major overhang. it's going to make it easier now to keep talent at merrill lynch. easier to find a cdo, it's going to make it easier for the compensation. and major overhang is now behind
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them. that's very, very important. now the big issue is what about the other. pnc and citi group, citi group has other issues with the government warrants out there as well. they got it done ahead of the nonfarm payrolls reports. finally, i want to note the retailers had a not good november. let's just be blunt about it. big lots had a very good commentary and report and they're a big discounter. costco is soft. big lots, good guidance for the fourth quarter. >> the key to remember about retail sales, we don't get same-store sales from the biggest, walmart, amazon, et cetera. >> that's right. we don't get that. we got enough to get a very good indication that the consumer shows up around the big events, around black friday, around black to school, and they kind of disappears. >> bob pisani, thank you. >> pleasuren. let's go down to the nasdaq and mike huckman. new 2009 high on the nasdaq.
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>> the threshold being 2209. we're at 2211. one of the cnbc stock guys pointing out the nasdaq is now up 40% so far this year after falling 40% last year. but, of course, that percentage move is all relative. we are higher here today in large part, of course, due to technology in particular. the semiconductor, chip sector, intel, for example, up 3%. marvel leading the pack, though, up now 8 1/2%. a lot of green here today, obviously, but among the laggards is the video game sector. in particular, take2 interactive losing more than one-third of the value because the company missed expectations. said it's going to lose money when wall street thought it was going to make money going forward. a whole bunch of analysts downgrading that stock. bio technology also helping out here today. the biotech index is up 1%. jpmorgan making a call this morning saying the sector hit bottom in october and it's got a lot of juice to turn sentiment more positive in 2010. separately, the firm initiating
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coverage of savient with out perform and it's up 3 1/2%. farmersmarke we're watching the commodities market. oil higher on the back of stronger than expected jobs data. gold is trading lower on the stronger dollar index. let's go to sharon epperson with the new york merc. >> here for the price of crude, we are looking at crude prices that are now off of their session highs. $78 a barrel. never quite making it to that mark but coming close. we lost 50 cents or so in the last 15 minutes of time. but the fact that we're looking at perhaps a positive jobs recovery here, consumer-led recovery, that is something that traders are paying more attention to than even the dollar when it comes to crude prices. we're look at the range we've been in, between $76 and $82 a barrel and unable to breakthrough that level. because at strength that we're
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seeing here in the dollar, again, though, gold prices up 25% in three months' time. after that meteoric rise coming back. thank you. >> thank you. bank of america flat after raising more than $19 billion selling new securities. largest bank capital raise on record according to dealogic. they will use the proceeds to pay back the t.a.r.p. which makes you wonder why the stock would move at all. they're raising money, which they will then turn over to the government. so the bank remains in the same place it was. here's how citi and wells fargo are trading. two other big banks supported by us. how does bank of america's move change the outlook for financials? let's bring in president of two financial funds. antoin antoine, what about this capital raise by bank of america? do i have it right or am i missing something that.
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they raise the money and they're going to pay back the t.a.r.p. the bank is in the same spot? >> they're in a different spot. >> tell me how. >> the pay czar is out of the picture. that's good news. they can now function. they can pay their bankers what they need to. they can hire a new ceo if they need to. >> i mean, i'm sorry. i didn't make myself clear. the balance sheet is still pretty much the same. i get the rule changes. >> well, the balance sheet is a little stronger from the perspective of there's more tangible common equity now. the t.a.r.p. was not tangible common equity. you've got a stronger balance sheet. more loss absorbing capital. >> anton, if you're on the sidelines right now, you're an investor and you want to get into bank of america but you know that these common equivalent securities will eventually be converted, theoretically that would be dilutive,is there an entry point down the road that is lower from where we're trading right now? >> if you believe this company
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can earn somewhere between 250 and $3 a share, you know, $16 is -- or $15 and change is a great place to buy this stock. from a dilution perspective you no longer have to pay the government. 5 dividend on the t.a.r.p. that's a lot of money as well that disappears in terms of expense. it's no doubt the company can go about business as usual. that's important, too, from an earnings perspective and growing this company and fixing it going forward. i think there's an upside here. >> anton, david faber. one of the bull cases for bank of america has been they're going to make a lot of money in a year and a half, two years, and not have the provisions, not have any t.a.r.p. payments or any of those kinds of things. and ultimately, you know, have normalized etfs of somewhere around 3 bucks. that's an appropriate multiple in your mind if, in fact, that scenario holds true? >> well, i mean, an appropriate multiple may well be somewhere between eight to ten times. i think i with k. ride that easily down the road.
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and then again you want to look at what we pay for a company is less risky, that's the dominant leader in number of businesses, whether it's deposits or credit cards or merrill lynch. you may want to pay a premium as well. certainly some targets people have talked about out there, $30 number. i don't see that as unattainable. if i see a $16 stock and $30 is possible in a couple of years, hinge of a nice return. >> near term, you don't have a ceo or you've got a ceo leaving the company in a couple of weeks. no word on replacements. rumblings out of the board about the structural change to the company. i would assume that does raise something of a near-term risk, doesn't it? >> it certainly raises risk and raises opportunity. i think if you were to hire a ceo that the street happens to like, you now open up the market as to who you can hire. >> you can actually pay them now, right? >> yes, exactly. >> it's not an egregious issue, it's the fact that if you look at the names out there and how
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much money they have at the current jobs invested stock, they can't get bought out of that. so it's not someone's being greedy, it's the fact that why would someone turn around and leave 15, $$15, $20 million beh. bank of america, hire them, creates more certainty and certainly a stronger balance sheet. >> thank you very much. appreciate it. >> pleasure. later this morning, creating jobs out of nuclear wastes. but first, stocks on the move. 40 minutes into the trading day. >> and after today's big jobs report the big question for 2010 is, when will the fed start taking the training wheels off the economy and shouldn't we start talking about a rate increase sooner rather than later? fed funds future pricing on a 72% chance of a rate hike in june versus a 40% chance prior to the jobs report. there is a change in sentiment. as we head to break, look at the biggest gainers on the dow this morning led by american express.
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let's get some stocks on the move. let's go to matt nesto at hq. >> we're checking out that intraday high we hit on the dow. look at american express, the best performer today. up over 3%. 29 of 30 stocks in the industrials trading higher here today except for dupont, which is not only the worst and only decliner in the dow. it's also the worst in the s&p 500. down 5 1/2% on news they're going to delay the launch of their newest seed technology.
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moody's strong, initiated a buy at bank of america/merrill with $28 price target. also mcgraw-hill, the parent company of standard & poor's initiated a buy as well. young brands down, too. pretty heavy volume. 2010 profits up 10% following a 12% gain this year. that means profits slowing. see the economy challenging. they say at least 10% of the market is cautious here today. you can see it's down a little bit. reynolds american is raise to buy from hold at citi group. stock is going to $59 a share. you've got plenty more upside. 4% on that upgrade. mike huckman talked about marvell, came out after the close with that strong third quarter results. guidance good. prompted upgrades in positive comments from citi, deutsche, goldman, right on down the line. check out smith & wesson, 17% lower here today in this after their 48% revenue growth in the trailing quarter is being ignored.
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their forecast is less than expected for revenues and down they go in double downgrades here today. back to you, mark. >> thank you, matt nesto. positive surprise for wall street came in the form of a strongest jobs report in two years. now the question turns to 2010. because why would we sit relaxed and enjoy a good number for an hour or two? can't do that. have to obsess about what happens next. when the fed will start soaking up all of the liquidity flooding -- i'm sure use! >> i know you're serious. >> i'm tired of this. why can't question just kickback and say, hey, good news. >> that's not the nature of the market. >> you know, senior economist at deutsche bank, hi, guys. >> hi. >> hi, david. >> good morning. >> tell me why i can't kickback and enjoy it, i got to start worrying about something else? >> you've got to worry about something. right now these are good numbers and a lot better than expected. >> thank you. i think they are, too. yes. >> it's still down 11,000. i would like a plus sign before
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i get really excited. >> when they revise it next month it will probably be a plus sign. >> maybe. >> at least if it is we're getting somewhere. statistics, canada, reported an increase in jobs. so there seems to be a trend here, does it not? >> it's turning around. i think that's clear. and it usually lags a little bit at the bottom. we're seeing it lagging a little bit. but i think we're starting to see the up turn in jobs. i do think the unemployment rates, though, is probably several more months. >> first of all, congratulations. i think your shop got it exactly right on the button on 10% unemployment rate. have we seen the worse in terms of the job losses? >> the big picture here really is it's a thing that's gone on for the last six months is this recovery sustainable. we look at it basically the two key sectors were housing and banking. those two sectors will get a lot of help from this decline and unemployment rate becausen unemployment rate going down means that people will be able to pay their mortgages and
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banking system, it means the banks will have fewer losses on their portfolios. overall this is very well for a sustainable recovery. >> it's interesting in terms of the timing of this better than expected jobs report in yesterday's white house jobs summit. a this point with this number does it take the wind out of the sails? do we not need the additional efforts and what can the administration do in your view? is there anything that you would like to see being done? >> it's a huge issue here that has always been very difficult for fiscal policy to get the timing and magnitude right. this may cause some additional thinking in terms of whether we need more fiscal stimulus because we already know we only paid out 25%, 30% of the fiscal stimulus so far. we have about 70% of the $787 billion left that will throw into the economy in the coming quarters. that is going to be quite helpful. that's why the sectors are important. will they be able to stand on their own legs in 2010. that's the key question when we think about whether this
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recovery is sustainable once we come to the other side. >> if you were limited to investing in stocks in only one country on the globe, which would it be? >> well, we look at it, a lot of our scenarios depend on what happens on the dollar. often people want to if cuss on, well, the dollar wants to go down. we need to think hard about, if this is a scenario you have as your baseline, what will the rest of the world look like. the europeans are already here complaining that your dollar is at an elevated level. if it goes down further it's going to create further trouble, in particular, europe, across the country and emerging markets. so the u.s. continues to be the most resilient economy in our view in the world oh we. >> so it would be the u.s.? >> the u.s. continues to look fairly attractive, yes. >> thank you both very much. all right. just ahead, the fabulous flying faber report. david's talking oracle and kraft. >> and later, with the jobs report in the rearview mirror, even though mark wants to
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continue to celebrate here in kickback. >> put it on the dashboard and look at it. >> what is the big trade going into next week? stay tuned for your friday trade.
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good news if you're a dow theorist. dow transports hitting a new 52-week high, higher by 2%. being led higher by the airlines. as north markets overall, very strong day. dow as well as s&p 500 hitting new 52-week intraday highs. although both backed off. nasdaq meantime hitting 2009 highs. s&p 500, key technical levels on that index are being held, 1113 to 1112 is what the technicians were looking for. holding fast to that level right now. okay. let's send it back to hq, david faber for the faber report. david? >> melissa, i want to start off
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on one of the difficult takeover stories that have been out there. oracle continues to fight to preserve its deal to acquire sun microsystems. and over the objections of the eu. today actually crafting that response to the statement of objectives -- objections from the eu, they'll be having a hearing on that on december 10th. so next thursday will be judgment day, so to speak. a story today in the new york post being denied as completely untrue by an oracle spokeswoman. that story saying they had proposed a sequestration, if you will, of my sequel. this is one of the units at the heart of the objections by the eu to the competitiveness or anti-competitiveness of the deal. again, they say that is completely untrue. not much more to offer there. we'll see what happens. we're less than a week away. of course, takeover investors playing this scenario.
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some one way, the other in terms of when and if it will close and what oracle is going to have to do. they say they remain completely committed to getting this deal done. another deal out there, of course, that we're following closely. kraft and its unsolicited bid for cadbury. today they made it official official. remember a few weeks back they actually said they were going to make the formal offer. now we start the clock in uk takeover time. day one. kraft coming with the exact saying -- exact same, really? i mean, i'm 45. the same offer. or the exact offer that they did previously. at this point. no surprise there. 300 pence in cash. 0.2589 new kraft shares. they're the only offer on the table. keen sense for the obvious there at kraft. hershey, of course, has told us it's reviewing its options. we'll see about ferrero.
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reports in an italian newspaper in which i cannot give you any sense of its validity saying they're not interested in sort of partnering. they just want to see if they can pick off a couple of units. ultimately the decision for hershey, will be, of course, the trust, the board of directors, town of harrisburg, pa, the attorney general, the governor, who knows who is going to get involved in that. we will see. but cadbury, by the way, again, back to this clock, day one today. 60-day period. they have to raise by day 46. there's still plenty of time for kraft, excuse me, to come back and raise for cadbury in this process. they may not. hershey may never materialize. may get a deal here. cadbury stock would certainly decline on that because it is trading well above the implied offer from kraft. all right. just ahead, is the administration breathing a sigh of relief over today's job report or is it still a big political football? plus, we're getting your money
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ready for the weekend for the friday trade as we head to break. dow up 140 points. let's call it 1.2%.
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all right. let's check the markets. dow up 124 points. that's 1.2%. nasdaq is looking real good.
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1 3/4%. and the s&p up 1.4%. let's check the infernals if oh, that's nice. 6-1 positive on the big board. nasd nasdaq, oh, yeah, 5-1 positive on the nasdaq. that is what you call a healthy up move. >> that is true. let's hit some stocks on the move. we've got a lot of them in today's session. it's like a smor gfor matt nest >> look at manpower, and monster worldwide, all up here today following the strong jobs report. the head hunters are asoaring here today. is a kn synovus is up 9% today. it is raised to out perform at friedman billings and ramsey. they call it a high risk, high reward play.
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down 76% on the year-to-date basis. look at her go. almost back to $2 a share. rackspace added to the conviction buy list at goldman sachs. they do that for mark haines, apparently. up 3 1/2% on the news. ak steel, one of the few decliners here today in the material space. cut to hold from buy at citi group. the airline stocks. did you see the passenger numbers from southwest overnight? holy cow, the best month they've since since the recession started. traffic up 5%. load factor improved by 20% to 76.5%. ual also strong in this marketplace with a 7% pop. now, that is a move to be reckoned with. mark, back to you. >> thank you very much, matt nesto. what are we doing next? >> the friday trade. >> so that was going to be my guess even though i didn't know. time to get the money ready for the weekend. it's time for the friday trade. roll the animation or box or whatever. on the floor with us, peter
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costa, president of empire executions as well as an official cnbc market analyst. do you have to go through rigorous training and pass a battery of tests before we will dub you a cnbc market analyst. and in indianapolis, go colts, bob philips, managing partner of spectrum managing group. bob, we'll start with you because you're 11-0 around the giants and jets stink. what do you think of this market? what can we do today to have a restful weekend. >> you couldn't get much better news than this morning with the jobs report. you've been talking about that. i do think that that justifies a market continuing to take the strong upward trend, go higher. a few stocks we like that should stand through thick or thin be consol energy. it's a producer of coal in the east coast. i do think the coal market
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worldwide tends to tighten over the next five years which ought to bode very well for them. as the u.s. starts exporting more coal. we'll be an exporting of that. another stock we like quite a bit is nationalle bow barko the oil services company with growing economy. demand stays strong there. exploration stays strong. $3.2 billion cash on the balance sheet. >> all right, bob. your other pick up there was amersource bergen. dubai puzzles me, do people need to go back or training there? >> my point is, what we have right now is a bad guess recovery. and that i mean that it's like the you put a tank of bad gas in your car it sputters and stops and stalls. now, you have 10% unemployment. these people, thieve been out of
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work for a while. this recovery is going to take a lot longer than the government thinks. i think that what's going to end up happening is a lot of people will end up going back retaining in new fields. i think they are wellpositioned on that. manpower, it's up $6. manpower is a great play in a recovery because businesses are not going to hire -- >> is pair trade? >> i don't look at it that way. if you're looking at a recovery that's going to take two years, manpower will be profitable over the next two years because no one is going to hire long term. they're going to hire short-term employees and people are going to need to be retrained. i figure it's a good play on a long-term recovery. >> market analyst. >> well, i'm here. >> it's logical. >> yeah. >> today anyway. >> thank you, peter costa and thank you, bob philips. president obama is heading to main street today. we showed you picture of him heading off to allentown,
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pennsylvania. he's got good news to bring with him. that is the jobs report we've been talking about. is the white house breathing a sigh of relief? we are minutes away now from meeting one of the top fund managers of the decade who's seeing returns of -- is that right? 56%. whoa! >> yeah. that's amazing. and turning nuclear wastes into jobs. that sounds like an intriguing topic. >> used to make material for nuclear weapons. now it makes jobs. and perhaps an investment opportunity for you. i'll have that when "squawk on the street" comes right back. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to.
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somewhere in america, there's a home by the sea powered by the wind on the plains. there's a hospital where technology has a healing touch. there's a factory giving old industries new life. and there's a train that got a whole city moving again. somewhere in america, the toughest questions are answered every day. because somewhere in america, 69,000 people spend every day answering them. siemens. answers. oh, yeah. stimulus scorecard time. now we're turning nuclear wastes into jobs. that's what the white house is hoping to do with some of our stimulus dollars. brian shactman is in aiken, south carolina, a hot spot, pun
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intended, for turning nuclear sites into jobs. he's live with this morning's stimulus scorecard. brian? >> it's incredible, mark. the savannah river site is 310 square miles. it's a holdover from the cold war although it does make train for num clar weapons. reactor we mind me was the second one to make plutonium for the nuclear weapons program in this country. lit be the first one to be completely shut down. it has been inactive since the late '80s. they're cleaning up, going to fill the bottom of it with concrete. that's what a lot of these jobs are going for. in the '50s it was an incredible legacy. we had an inside look at it yesterday. the $1.6 billion coming to this whole site is going toward really dealing with the legacy of the cold war. regardless of your opinion of whether it's taxpayer money well spent, it has definitely saved and created jobs. >> be the rest of the world right now as far as the
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recession goes. it's struckling to get a job, struggling to go to school. >> more than 1400 jobs have been created here. 800 have been saved. now, this project of getting this thing completely shut down was supposed to be done in 2015. it's going to be done in 2011. it's a situation where corporatewise, there is a major tie-in. floor, north up there drum monday. fluor is the management leader down here. they balance out their oil and gas business. they also think of it as something to get in on the ground floor of what they consider a a major growth area. >> it helps us build our portfolio. companies in this market, helps us demonstrate success that we can perform in this market. and also positions us for the future market, which is the emerging nuclear industry. >> it's been more than 30 years since we've had a nuclear power
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plant come online. fluor is basically making a bet that that's going to change. a lot of projects already in the pipeline. they think with the business of management and clean-up long after the recovery act money is spent, it will be billions and billions of dollars to be made. back to you. >> thank you, brian shactman. 10:41 on wall street, 7:41 on the west coast. here are your headlines we're following. jobs report coming in much better than expected. we lost 11,000 jobs in november. that is the fewest since december of 2007. general motors announcing major executive changes. on the list, engineering chief now in charge of north american operations. vice chair bob lutz reassigned as vice chair and adviser on design and global development. credit suisse expects global equity markets to post a return of 12 percent by mid next year. it sees a renewed bear market emerging in late 2010. president obama as we mentioned to you heading to main street today. he is in allentown, pennsylvania. got good news to bring with him.
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that is surprisingly strong jobs report. the white house breathing a sigh of relief? he's open up the harwood file. good morning, john. >> hey, melissa. the white house is breathing a sigh of relief but not for very long. they know this is an early christmas present. democrats on the hill know that, too, buzz they expect this unemployment rate is going to go back up for several more months now. and you can bet that this administration and the democratic majority in congress is going to prepare a jobs bill. we saw that previewed at the jobs summit at the white house yesterday, where the president talked about money for infrastructure projects, for states and local governments. so-called green jobs, incentives for people to weatherize and make their homes more energy efficient. and, yes, wall street, there will be some tax cuts as well. the president talked about the success so far of tax cuts to incentivize small business for hiring and maybe some more of those on the way if policymakers
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can figure out how to make it work successfully. now, here's what the impact of a jobs bill might be. this is from mark zandi. if you spend $230 billion over the next two years, you could create 1.3 million jobs by the end of 2010. and by the second quarter of 2011, reduce the unemployment rate by 1 percentage point. that doesn't sound like a lot and it's a lot of money to achieve that with a lot of the steps that the administration was talking about yesterday. but democrats are looking for something to try to show voters headway going into the 2010 elections, guys, because otherwise it's going to be really ugly. mark zandi told me today that despite the positive jobs report today, he still expects unemployment to peak at 11% sometime in the middle of 2010. so they need some help. guys? >> thank you very much, john harwood. we are just minutes away from revealing one of the best
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performing funds of the decade. and meeting the manager who will share the secrets of his success on this very big day for the markets. but first, oh, melissa! >> hey, mark. coming up at the top of the hour, we are all over this jobs report sparking today's rally. money managers will join us to talk about changing strategies for investing and job recover i. and is today's employment report a sign that the economic stimulus plan is working or maybe the economy is just healing? we're going to debate that. plus, president obama taking his job creation tour on the road. he's due to speak from allentown, pennsylvania. we're going to cover the event live on "the call." but first, "squawk on the street" is back after this break.
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check on the markets for you. as you can see right now, this is where we've been for quite some time now. right around 10,500, which is up 130 on the yesterday's close. nasdaq is doing well. up almost 2%. s&p 500 up almost 1 1/2%. at 1186, 1117 was a significant technical level. >> no, 52-week intraday high. we broke through that. but 1112, 1113 was a significant technical level on the s&p 500. we are above that. >> okay. you got gold, i think. no, you don't. >> you have gold. but you know, we can both have gold. that's fine. >> i could have swore you had gold. gold is down 3%. big drop. i don't keep track of daily moves here but i think that's the biggest daily drop in quite a while because it's been on a great run. so still at 1180 roughly, even after dropping 38 bucks today.
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>> another installment of our decade's best series. today's focus, eastern europe, the u.s. globe investors fund up 55% over the past ten years with an annualized return of 18%. john derrick is u.s. global investors director of research and portfolio manager. john, fwrat great to have you w. >> great. thanks for having me. >> like many emerging markets the areas in which you focus are really driven by the rise of the middle class, the growth of the consumer there. is that a trend that will remain intact in even countries like russia as it develops more and more? >> yeah, definitely. i think that's going to be the theme for the next probably five years or maybe five to ten years. i think the growing middle class is going to be the next major theme in emerging markets. and obviously eastern europe is going to benefit from that trend as well.
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is russia the slower end of the spectrum versus a turkey or another eastern country in europe? >> i don't think so. russia is going to be a bigger beneficiary of higher commodity prices as we go through the next five, ten years. higher commodity prices are in the future. that's going to be a rising tide that lifts all boats in russia. and so because of that, you are going to have more purchasing power. the ruble will probably strengthen. i would say, russia, while they have their issues, actually will be one of the faster-growing regions over the next several years, even within that economy. i think turkey will continue to grow pretty quickly. you already have a budding middle class in both places. >> if i wanted to bet on a growing middle class or emerging middle class, why would i mess around with europeans, eastern or western? why wouldn't i just go to asia? >> well, you could definitely do
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that, but i think the idea is that asia and china, in particular, while obviously they have a growing middle class and that's part of that story, the growing middle class is going to use a lot of the products and services that are going to be made or developed or produced out of russia or turkey. obviously the chinese need oil and natural resources and that's going to come from russia. especially the proximity from russia to china is strategic and they will be a big beneficiary of that. turkey is already a manufacturing hub for a lot of european goods, in particular. say like autos and those kind of things. those are things the chinese are going to buy, as well. so i think when you look at the stock markets, the stock markets say in russia and in turkey are trading at roughly nine times earnings. so i think from a relative value standpoint, it looks like an attractive area to mine for ideas and for investment. >> john, we want to show our viewers your top five stock
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recommendations. are any of these recommendati recommendations, do any of them trade here in the u.s.? >> one trades in the u.s., a couple in london and local markets. the theme predominantly behind those picks is that consumer theme. retailers in particular in russia are very attractive as they move to more western style formats. the banking sector is another area that will grow with the economies of eastern europe. otp bank, in particular, i know hungary has gotten a lot of negative press. a lot of ukrainian exposure. we were there last month and feel better about where hungary is and how the economy is progressing. that bank, in particular, is well positioned and trading at 1.1 times book.
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very attractive position. >> john derrick, thank you so much for your time. >> we are closing out the week with six stocks in 60 seconds. >> and we are almost 90 minutes into the trading session. pothole:h no...your tire's all flat and junk. oh, did i do that? here, let me get my cellular out - call ya a wrecker. ...oh shoot...i got no phone ...cuz i'm a, bye! anncr: accidents are bad. anncr: but geico's good. with emergency road service. ding! ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is.
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completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco.
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we are back. time for six in 60. i go first this time. big lots. the closeout retailer posting a better than expected quarterly profit, raising its outlook for the holiday fourth quarter. reynolds america, a new 52-week high. upgraded to buy from hold at citi. upping its price target to $59 from $52.
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under armour. initiated buy at jeffries. >> moody's is one i'm watching, mco initiated a buy. bank of america, merrill lynch, price target of 28 buck as share. higher by almost 7%. southwest airlines, up over 7% from the same month of last year. and luv is gaining nearly 50% in the past six months. ak steel cut to a hold from buy. citi prefers nucor and u.s. steel at current levels. >> friday with a very good jobs report under our belt and the market is responding as you would expect. they changed all these boards. i have a hard time with them now. >> yeah. >> dow is up only 100. we've come off the highs. nonetheless, i think it is fair to say this is a good number for the markets. >> yeah. we are watching the s&p 500, as
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well, of course. the key technical level looks like it's teetering there right now. that is one we are watching, 1112. if you are a dow theorist and you believe the transports will advance and clear what it for the roast of the market because you need to transport goods in a recovering economy, so we do see djt up. >> transports today, new intraday high and along with the industrials. they are in the dow 30. they are kind of confirming each other once again. they gave a bull market signal quite a while ago. all in all, we are in good shape here. >> here is something that's important in today's session. that is that weak dollar strong stock trend. inverse correlation. that seems to have broken for today. dollar index higher by almost one full percentage point. interesting to note so many traders out there said short dollar trade was the most
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crowded trade out there. part of this pop in the dollar index we are seeing today, obviously the better than expected economic data, but the fact a lot of the shorts out there are, in fact, getting squeezed. we have the dollar index up today. the corollary trade to this, of course, gold. gold down. >> not looking good today. >> down sharply. down about 3.75%. the miners are getting hammered also in today's session. names like newmont gold and barrick gold trading sharply to the down side. >> it has had a nice run. we don't mean to denegrade that. if you are bullish on gold, you might consider today a buying opportunity. it is definitely getting hurt. >> all right. >> when are you on next? >> halftime" and fast money" at 5:00. catch it all today on cnbc. >> hardest-working woman in show business. i for one oi


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